KUALA LUMPUR, Nov 11 — The COVID-19 vaccine development by Pfizer Inc and BioNTech SE could be a signal that the worst might be over for the pandemic, and is likely to prompt investors to take profit on beneficiary stocks, said CGS-CIMB Securities Sdn Bhd.
CGS-CIMB said the stocks have done extremely well in terms of share price performances year-to-date, but investors are likely to switch to COVID-19 recovery plays, namely banks, airlines, airports, retailers, gaming and media, as their share prices have been significantly dented by movement restrictions.
“In our second half of 2020 strategy note, we have mooted the COVID-19 recovery theme and advised investors to start accumulating stocks in these sectors due to their attractive valuations and expectation of earnings recovery, post-pandemic, in 2021,” it said in a research note today.
The stockbroking firm said Pfizer and BioNTech announced that their vaccine was more than 90 per cent effective at preventing COVID-19.
However, it noted that while the vaccine discovery was a positive development, some questions and concerns remained, including whether the vaccine could prevent severe disease or complications, how long will it protect against infection and how well it would work in the elderly.
“Based on current projections, the companies expect to produce up to 50 million vaccine doses globally in 2020 and up to 1.3 billion doses in 2021,” it said.
Meanwhile, CGS-CIMB said the gaming, airline, airport, REIT, media, bank, hospital, brewer, tobacco and oil and gas sectors could potentially rebound once COVID-19 cases subside globally or a vaccine is developed.
It said companies that would benefit from international borders reopening include Genting Bhd, Genting Malaysia Bhd, Malaysia Airports Holdings Bhd, IGB Real Estate Investment Trust, IHH Healthcare Bhd and KPJ Healthcare Bhd, mainly due to higher tourist arrivals.
“For exposure to the economic recovery post-COVID-19, we favour the banking sector, which we recently upgraded to overweight as we fell that most of the bad news has been priced in.
“Our top picks in the banking sector are Public Bank, Hong Leong Bank, RHB Bank and AMMB. The media sector is likely to see a recovery in advertisement expenditure revenue, and we have ‘add’ calls across the board with Astro as our top pick,” it said.
It added that the oil and gas sector could also benefit if crude oil price recovered following higher oil demand, and named Yinson Holdings Bhd and Dialog Group Bhd as its top picks. – BERNAMA